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Sweeping reforms are on the way to give schools a better deal on the £180m they spend each year on management information systems.

Becta, the Government's lead agency for ICT in education, has called for a complete overhaul of MIS provision in schools amid serious concerns about the current state of play.

A review has uncovered widespread dissatisfaction among schools and local education authorities about MIS software quality, support and supplier costs – which in one case had risen 300 per cent in three years.

Publishing the findings on 18 August, Becta pointed to a lack of competition in the school MIS marketplace and "considerable impediments to the exercise of effective choice by schools".

It also noted a "lack of any significant contractual commitment between the dominant supplier [Capita Education Services] and schools /L EAs regarding the timeliness and quality of software provided."

Becta said the present situation was "suboptimal" and could create "major challenges" for the future if left unchecked.

The agency forecasts that out of the estimated £180m annual expenditure on MIS, schools' support costs amount to some £55m each year.

"We confirm that there are considerable impediments to maximising the potential value for money flowing from that expenditure", it stated.

"Those impediments span all aspects of the current arrangements including the contractual landscape, the technical environment, the support arrangements and the statutory returns process."

According to the report, every provider of school-wide systems – except for the dominant supplier – argued that the current "architectural model" for MIS delivery to schools had "considerable inefficiencies". An industry representative claims that changes to the current model would save £72m annually.

The first of Becta's nine recommendations for improving value-for-money is the setting up of a new national framework agreement for suppliers of MIS systems and services, which may be in place by next year.

"The underpinning contractual terms and conditions for approved suppliers", says the report, "should reflect effective choice principles, improved pricing visibility, minimum service levels... and conformance to open technical and data standards."

While the framework would be aimed at the school ICT marketplace in England, Becta said it planned to consult with the devolved administrations on extending the scheme to Scotland, Wales and Northern Ireland.

To reduce costs further, the Department for Education and Skills is advised to encourage groups of LEAs to either consolidate their MIS support teams or enter into partnerships.

With the Department requiring schools to supply increasing amounts of information, Becta proposes a phased change whereby the DfES would request the data directly from suppliers, rather than schools, under a contractual arrangement.

In a statement, Becta's chief executive, Owen Lynch, stressed the importance of management information to raising school standards.

He said: "Addressing the range of factors that are barriers at a national, regional and institutional level to maximising the benefits that MIS systems can bring is complex but essential."

Lord Adonis, the schools minister, has now asked the agency to take forward the recommendations.

School Management Information Systems and Value for Money (PDF: 603KB)

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